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Line jumps in US debut of 2016's biggest technology IPO

Line Corp rose in its US trading debut after the Japanese messaging company raised more than US$1 billion in the biggest technology initial public offering of the year.

PHOTO: REUTERS

[NEW YORK] Line Corp rose in its US trading debut after the Japanese messaging company raised more than US$1 billion in the biggest technology initial public offering of the year.

Shares rose to US$40.80 as of 11:41 am in New York, after climbing to as much as US$44.49 in earlier trading. That values the company at about US$8.6 billion. The stock was sold to investors in the IPO for US$32.84 apiece.

Line, owned by South Korea's Naver Corp, raised US$1.3 billion after pricing its offering at the high end of an increased range. The company, which is listing shares in Japan and the US, will start trading in Tokyo on Friday.

Line sold 35 million shares and said it will fully exercise a greenshoe option to sell an additional 5.25 million shares.

"We will be focusing on our four key markets: Japan, Taiwan, Thailand and Indonesia," Line's chief financial officer In-Joon Hwang said in a Bloomberg TV interview.

"We will be using money for any investment opportunity to strengthen existing business."

Facebook, Twitter Investors will be keen to look past the first few days of trading. Line will likely be measured going forward against fellow tech stocks Facebook Inc and Twitter Inc, for which user growth has been a key metric. Line, which has about 218 million users, said in its prospectus that the pace of user growth has slowed.

Despite market volatility and a surging yen triggered by the UK's Brexit vote, Line raised its IPO price by 18 per cent from an initial estimate and exercised an option to sell more stock. The company sold less than a fifth of its total shares in this week's offering.

Tokyo's influential day traders will be watching Line's open ahead of its debut in its home market on Friday, and could spark an early feeding frenzy for the shares. The traders have a tendency to favour stocks popular with the general public, with retail investors drawn to the IPOs of companies whose services they use.

Line's sales grew 40 per cent last year to 120.7 billion yen (S$1.54 billion), with games, streaming music and comics accounting for 41 per cent of that. But the company chalked up a net loss of 7.6 billion yen in the period, according to its IPO filing.